TY  - BOOK
AU  - Koijen,Ralph S.J.
AU  - Yogo,Motohiro
ED  - National Bureau of Economic Research.
TI  - Understanding the Ownership Structure of Corporate Bonds
T2  - NBER working paper series
PY  - 2022///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - January 2022; Hardcopy version available to institutional subscribers
N2  - Insurers are the largest institutional investors of corporate bonds. However, a standard theory of insurance markets, in which insurers maximize firm value subject to regulatory or risk constraints, predicts no allocation to corporate bonds. We resolve this puzzle in an equilibrium asset pricing model with leverage-constrained households and institutional investors. Insurers have relatively cheap access to leverage through their underwriting activity. They hold a leveraged portfolio of low-beta assets in equilibrium, relaxing other investors' leverage constraints. The model explains recent empirical findings on insurers' portfolio choice and its impact on asset prices
UR  - https://www.nber.org/papers/w29679
UR  - http://dx.doi.org/10.3386/w29679
ER  -